Saturday, October 04, 2008

The American economy lost 159,000 jobs in September, the worst month of retrenchment in five years, the government reported on Friday, amplifying fears that an already painful downturn had entered a more severe stage that could persist well into next year.

Employment has diminished for nine consecutive months, eliminating 760,000 jobs, according to the Labor Department’s report. And that does not count the traumatic events of recent weeks, as a string of Wall Street institutions collapsed, prompting the $700 billion emergency rescue package approved by Congress on Friday.

“It’s a dismal report, and the worst thing about it is that it does not reflect the recent seizure that we’ve seen in the credit markets,” said Michael T. Darda, chief economist at MKM Partners, a research and trading firm in Greenwich, Conn. “There’s really nothing good about this report at all. We’ve lost jobs in nearly every area of the economy, and this is going to get worse before it gets better because the credit markets have deteriorated basically on a daily basis for the last few weeks.”

Though the bailout may restore order to the financial system and eventually filter through the economy by making it easier for businesses to secure capital, few analysts expect it to swiftly reverse the nation’s fortunes. Housing prices continue to fall, eroding household wealth just as millions suffer the weight of unmanageable debt. The deteriorating job market has taken paychecks out of the economy, reinforcing a predilection for thrift that has cut sales from car showrooms to hair salons.

Banks should see their balance sheets improve as the government relieves them of disastrous investments, yet they may remain skittish and reluctant to lend. Complete Story........

Friday, October 03, 2008

In a filing Friday with the Securities and Exchange Commission, the Overland Park-based company said the $325 million, which the company borrowed Thursday, has an interest rate of roughly 5.2 percent. The debt the company will pay off — $225 million at 8.25 percent interest and $100 million at 6.5 percent interest — is due in December and May, respectively.

Around 3 p.m. Friday, YRC’s stock was trading at $7.74, down $2.17, or 22 percent, on volume of 5.4 million shares, according to Yahoo Finance. The stock traded Friday as low as $7.44, down 25 percent. The stock’s average daily volume the past three months is about 2 million shares.

In a release, YRC Chairman and CEO Bill Zollars said the “unrest in the credit markets” prompted it to pay the higher-interest debts early.

“Our current financial condition is solid, and with no further note maturities until 2010, we are well-positioned to weather this economic environment,” Zollars said in the release.

YRC said it has nearly $400 million available through its credit facilities.

In an internal memo to employees, Zollars said the refinancing will enable it to accelerate the integration of Yellow and Roadway.

YRC said in the SEC filing that its Yellow Transportation Inc. and Roadway Express Inc. subsidiaries officially merged into Yellow Roadway Corp. on Wednesday. YRC said it plans to change the name Yellow Roadway Corp. to YRC Inc.

Thursday, October 02, 2008

Teamsters want to capitalize on Ohio's new early voting policy. With the general election less than five weeks away, Union leaders are trying to spread the word to their members that it's important to vote early.

Teamsters president Jim Hoffa and his crew brougt that message to the Tri-state today, with the Union's "Early Vote Express," a convoy of trucks traveling to work sites around Ohio.

The group made a stop at First Student, in Arlington Heights, around 8:30 this morning. They visited Roadway Express, in Sharonville, earlier today.

First Student employees unionized just over a week ago and many said they were happy to finally have a voice in the company and are looking forward to better benefits and better pay. Many clutched "Teamsters for Obama" signs and stickers handed out by Hoffa.

Ohio Teamsters president Roger Insprucker says many of the workers he's been talking to are worried most about the economy and health care. He says the recent Wall Street/foreclosure/credit crisis has forced a lot of union members to become educated quickly about their own economic standing and retirement plans, which has spurred greater interest in voting.

The "Early Vote Express" has already made stops in Toledo, Cleveland and Akron. Others are planned for Dayton and Columbus.

Tuesday, September 30, 2008

The Teamster Union's "Early Vote Express" convoy will make a stop in Cleveland and the surrounding area on Tuesday, September 30, 2008, carrying the message to Teamster members about the importance of casting their ballots early for the upcoming election.

Teamster officials are traveling the state this week to meet with members at their job sites, discussing important issues affecting their lives and their families, including the country's financial crisis, the job-killing trade policies backed by Sen. John McCain, the failing Bush-McCain economy and affordable health care.

YRC Worldwide Inc., a major trucking firm based in Overland Park, has decided to close its administrative center in south Topeka, eliminating 90 jobs.

About half of the employees will be transferred to the company's Overland Park offices and the other half will be eliminated or outsourced, said Bill Zollars, chairman, president and chief executive officer of YRC Worldwide, owner of Yellow Transportation and Roadway trucking lines.

"This is a symptom of the weakened economy," Zollars said Monday. "Our industry is tied to the economy and we've seen the economy softened and weakened."

Volumes going through the Topeka office were down 20 percent from a year ago, Zollars said.

The center at 3420 S.W. Van Buren will close by Dec. 31. The employees have been handling billing and bill collection. They were reasonably well-paying clerical jobs, Zollars said.

"Nobody feels more badly about it than I do," Zollars said. "But it is a sign of the times right now."

Zollars said trucking volume has declined as a result of a slowing economy. He blamed part of the slowdown on high fuel prices.

Zollars said the company has cut about 250 jobs in Overland Park offices over the past year, trying to make operations reflect existing business volumes.

Zollars said he was disappointed the House rejected the $700 billion bailout package. The ripple effect will be significant, affecting retirement savings accounts, availability of credit and job losses, he said.

Without the package, it will become more difficult to borrow money, he said. "The implications are pretty significant if Congress doesn't put together a plan to help out," Zollars said. "If you let it run its course, the ripple effect could get to the point where it will do serious structural damage to the economy. The easy thing to do is look for revenge. They're too focused on revenge."

Because the package failed, investors were in selling mode Monday, sending the Dow Jones industrial average down 6.98 percent, the Nasdaq down 9.14 percent and the Standard & Poor's 500 index down 8.79 percent.

Monday, September 29, 2008

Reimer Express has promoted Clayton Gording to president of the Winnipeg-based LTL carrier. The appointment is effective immediately.

Gording, who has been VP of Operations since 2001, was responsible for all service center operations, line haul operations, vehicle purchasing, company-wide vehicle maintenance and labor relations.

He also had responsibility for a range of sales and management roles.

Reimer Express -- ranked as Canada's 20th largest for-hire carrier by Today's Trucking -- is a Canadian subsidiary of U.S. LTL giant Roadway Express, which is a wholly-owned division of YRC Worldwide.

Gording began his career with Reimer Express in 1966 serving in a variety of clerical positions at the Regina, Sask. head office.

"Clayton's vast experience and commitment to Reimer Express is a tremendous asset to the company and, subsequently, our portfolio of YRC Worldwide services and solutions," said Terry Gilbert, President, Roadway Express, in a company press release. "Under his leadership, I am confident that Reimer Express will continue to set the pace for Canada's expedited and LTL freight transportation services."

Gording has also served as the director of the Manitoba Trucking Association (MTA) between 2006 and 2008. He currently serves as past president. At the same time, he served on the board of the Canadian Trucking Alliance (CTA) from 2006-08.

Despite some analyst concerns that YRC Worldwide might be in danger in light of the current financial crisis, the company's CEO told the Associated Press that there is enough liquidity to maintain operations.

"We're in pretty good shape," said President, Chairman and CEO William D. Zollars. He said the company has about $600 million in liquidity.

Zollars said the crisis' timing, coinciding with the peak holiday shipping season, will allow the company to better manage the problems.

Zollars' comments come days after Longbow Research analyst Lee Klaskow pointed to YRC and Swift Transportation as being particularly at risk in a shaky market. Klaskow especially saw troubles with YRC's plan to merge its Yellow and Roadway subsidiaries.

"Management has promised a lot and not delivered that much," Klaskow told the AP.

An analyst at Longbow Research said that trucking companies YRC Worldwide and Swift Transportation could be at risk due to the crisis in the financial markets, the Associated Press reported.

Analyst Lee Klaskow said Swift, which was taken private last year by founder Jerry Moyes, likely is most at-risk in the current shaky markets. Additionally, Klaskow said YRC has a great deal of execution risk in its planned investments and by combining subsidiaries Yellow Transportation and Roadway.

"Management has promised a lot and not delivered that much," Klaskow said of YRC.

Comparatively, Klaskow said that LTL carriers ABF Freight Systems and Con-way are "in good shape" as far as their debt and associated risk levels.

As for truckload carriers, Klaskow said that J.B. Hunt Transport services is highly leveraged compared to others, but that Knight Transportation and Heartland Express both are in good position with strong balance sheets.

Total goods carried by trucks in the U.S. fell in August compared with the previous month, marking the largest month-to-month drop since March, a major industry trade group said.

The American Trucking Associations said late Wednesday its seasonally adjusted tonnage index, which measures the weight of freight hauled by U.S. truckers based on membership surveys, fell 1.6 percent in July.

The trade group also said the index fell 0.9 percent in July - revised from the 0.3 percent decline originally reported.

ATA Chief Economist Bob Costello said the downward trend indicates that the U.S. economy will fall into a "mild" recession later this year and early next year.

The Arlington, Va.-based trucking group's members include United Parcel Service Inc. and Knight Transportation Inc.

Truckers serves as a gauge of U.S. economy health because they haul about 70 percent of manufactured and retail goods.

The financial crisis that's putting a new squeeze on freight transportation is also shining harsh light on overseas investment by U.S.-based trucking companies, pushing companies to take a new look at how and where they invest in efforts to bring global business into their networks.

Whether the massive federal bailout keeps the stalling economy from lapsing into a long-term recession, weak demand and unprecedented turmoil in the credit markets could cool what has become an important effort to push more deeply into expanded supply chains.

"When the entire logistics system depends upon performance in overseas production areas, then owning something in those areas adds control to the transportation system," said Donald Ratajczak, emeritus professor at Georgia State University and consulting economist for investment bank Morgan Keegan. "And when the cost of transportation is rising so rapidly because of fuel, greater control of your entire system certainly makes sense."

A global recession, however, would reduce the near-term return on those investments, Ratajczak said, and make it harder for transportation companies to pull the trigger on expansion, especially when it involves hard assets. Full Story........